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    Buscom PART 2

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    Nathalie Getino
    1. A business combination can occur through various methods including purchasing all assets/liabilities, voting shares, or acquiring control without transferring consideration. 2. After a business combination where control is acquired, the acquired entity ceases to exist as a separate legal or accounting entity, and the acquirer records the acquired assets, liabilities, and any non-controlling interests. 3. PFRS 3 requires business combinations to be accounted for using the acquisition method, which involves identifying the acquirer, determining the acquisition date, and recognizing and measuring the identifiable assets acquired, liabilities assumed, and any resulting goodwill or gain from a bargain purchase.

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    Buscom PART 2

    Uploaded by

    Nathalie Getino
    48 views3 pages
    1. A business combination can occur through various methods including purchasing all assets/liabilities, voting shares, or acquiring control without transferring consideration. 2. After a business combination where control is acquired, the acquired entity ceases to exist as a separate legal or accounting entity, and the acquirer records the acquired assets, liabilities, and any non-controlling interests. 3. PFRS 3 requires business combinations to be accounted for using the acquisition method, which involves identifying the acquirer, determining the acquisition date, and recognizing and measuring the identifiable assets acquired, liabilities assumed, and any resulting goodwill or gain from a bargain purchase.

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    Business Combination

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    buscom PART 2

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    1. A business combination can occur through various methods including purchasing all assets/liabilities, voting shares, or acquiring control without transferring consideration. 2. After a business combination where control is acquired, the acquired entity ceases to exist as a separate legal or accounting entity, and the acquirer records the acquired assets, liabilities, and any non-controlling interests. 3. PFRS 3 requires business combinations to be accounted for using the acquisition method, which involves identifying the acquirer, determining the acquisition date, and recognizing and measuring the identifiable assets acquired, liabilities assumed, and any resulting goodwill or gain from a bargain purchase.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    48 views3 pages

    Buscom PART 2

    Uploaded by

    Nathalie Getino
    1. A business combination can occur through various methods including purchasing all assets/liabilities, voting shares, or acquiring control without transferring consideration. 2. After a business combination where control is acquired, the acquired entity ceases to exist as a separate legal or accounting entity, and the acquirer records the acquired assets, liabilities, and any non-controlling interests. 3. PFRS 3 requires business combinations to be accounted for using the acquisition method, which involves identifying the acquirer, determining the acquisition date, and recognizing and measuring the identifiable assets acquired, liabilities assumed, and any resulting goodwill or gain from a bargain purchase.

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    of 3

    ACCOUNTING PART 2 – BUSINESS COMBINATION (PART 2)

    1. A business combination can be affected through


    a. Purchase of all of the assets and assumption of all of the liabilities of an acquiree by the acquirer
    b. Purchase of all or some of the voting shares of the acquiree, sufficient for the acquirer to obtain control over
    the acquiree
    c. Acquisition of control without transfer of consideration
    d. Any of these
    2. After this type of business combination, the acquired entity ceases to exist as a separate legal or accounting
    entity. The acquirer records in its accounting records the assets acquired and liabilities assumed in the business
    combination.
    a. Stock acquisition
    b. Acquisition of control without transfer of consideration
    c. Combination of mutual entities
    d. Asset acquisition
    3. It is a statutory type of business combination which occurs when two or more companies merge into one
    single entity which shall be one of the combining companies.
    a. Merger
    b. Consolidation
    c. Stock acquisition
    d. Mutual combination
    4. It is a statutory type of business combination which occurs when two or more companies merge into a single
    entity which shall be the consolidated company.
    a. Merger
    b. Consolidation
    c. Stock acquisition
    d. Mutual combination
    5. PFRS 3 requires a business combination to be accounted for using the
    a. Purchase method
    b. Acquisition method
    c. Goodwill method
    d. Control method
    6. The acquisition method requires which of the following?
    a. Identifying the acquirer
    b. Determining the acquisition date
    c. Recognizing and measuring the identifiable assets acquired, the liabilities assumed and any non-controlling
    interest in the acquiree
    d. Recognizing and measuring goodwill or gain from a bargain purchase
    e. All of these
    7. It refers to the entity that obtains control after the business combination.
    a. Acquired
    b. Acquiree
    c. Acquirer
    d. All of these
    8. According to PFRS 3, this is the date on which the acquirer obtains control over the acquiree.
    a. Control date
    b. Date of purchase
    c. Acquisition date
    d. Birthdate
    9. According to PFRS 3, the acquisition date is normally the
    a. Control date
    b. Purchase date
    c. Closing date
    d. Valentine’s date
    10. It is a business combination of two or more entities with similar business.
    a. Vertical combination
    b. Identical combination
    c. Similar combination
    d. Horizontal combination
    11. The objective of PFRS 3 is
    a. To lend credibility to the financial statements which the users will use in making economic decisions in
    investing or lending in a business undergoing business combination.
    b. To give the users information who are not in the position to require the entity to prepare financial statements
    in their tailored needs.
    c. To improve relevance, reliability and comparability of the financial reporting of an entity in relation to a
    business combination by establishing the recognition and measurement principles and disclosure requirements.
    d. To provide relevant and faithfully represented financial information which abide with the fundamental
    qualitative characteristics that improves the proper recognition, measurement and disclosure requirements in a
    business combination.
    e. None of these
    12. Which of the following is not a disadvantage of a business combination?
    a. Business combination brings monopoly in the market which may have a negative impact in the society.
    b. Management of the combined entity may become difficult due to incompatible internal cultures, systems, and
    policies.
    c. The combination will never result to business synergy.
    d. All of the above are disadvantages of a business combination.
    13. PFRS 3 applies to transactions that meet the definition of a business combination. It does not apply to the
    following, which is the exception?
    a. The formation of a joint venture.
    b. A combination of entities or businesses under common control
    c. A combination of two sole proprietorship business entities.
    d. A combination of entities operating at different levels in a marketing chain.
    14. It occurs when the collaboration of two or more entities results to greater productivity than the sum of the
    productivity of each constituent working independently.
    a. Business combination
    b. Cooperation
    c. Synergy
    d. Competition
    15.ABC Co. acquires 51% ownership interest in XYZ, Inc.’s preference shares.
    a. ABC is presumed to have obtained control over XYZ because it obtains more than 50%.
    b. A 100% ownership is need for ABC to obtain control over XYZ.
    c. It is non-determinable because it is not stated if what type of business combination is made but base on the
    problem it may be assumed that the combination ABC obtained control.
    d. ABC does not obtain control over XYZ.

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